The UK economy expanded by 0.6% in the first quarter of the year, driven by a resilient services sector, according to official data from the Office for National Statistics (ONS). While the headline growth offers a steady start for the UK, underlying financial strain is painting a much more fragile picture for small and medium-sized enterprises (SMEs) across the country.
A newly published Business Barometer study reveals that a staggering 90% of UK small business owners say the ongoing cost-of-living crisis continues to threaten their growth plans. Although a recent SME Pulse report indicates that average small business profit growth actually hit a four-year high of 7.4%, converting those profits into available liquid cash remains a major hurdle.
Widespread issues with late customer payments and rising labour costs are severely bottlenecking cash flow. Consequently, many business owners are adopting highly defensive strategies, preferring to scale back recruitment or grow slowly rather than taking on the risk of external financing.
